H.R. 3549: Critical Businesses Preparedness Act

The proposed bill, known as the Critical Businesses Preparedness Act, aims to offer a financial incentive for certain businesses that are classified as critical in high-risk disaster areas, particularly regarding the installation of electric generators. Here's a summary of the key components:

Tax Credit for Electric Generators

The bill introduces a tax credit that allows critical businesses to claim 30% of their expenses related to electric generators placed into service within designated high-risk disaster areas. This credit is applicable for any taxable year in which the expenses were incurred.

Definition of Specified Taxpayer

A "specified taxpayer" under this bill refers to businesses that are considered essential during emergencies, particularly following events like floods or hurricanes. The Secretary of the Treasury will define which businesses qualify, but it explicitly includes:

• Hospitals
• Nursing homes
• Grocery stores
• Gas stations

Qualified Expenses

Qualified expenses under this bill encompass all costs associated with purchasing and installing electric generators for the specified businesses. These generators must be utilized in areas identified as high-risk for flooding or hurricanes.

High Risk Disaster Areas

The bill specifies that a "high risk disaster area" is determined by the Secretary of the Treasury in consultation with the Federal Emergency Management Agency (FEMA). These areas are assessed based on their vulnerability to disasters like floods and hurricanes.

Double Benefit Prohibition

The legislation includes a provision that prevents businesses from receiving multiple benefits for the same expenses. Specifically:

• If a business claims the tax credit for generator expenses, it cannot also claim a deduction or any other credit for those same expenses.
• The basis of the property (the generator) will be adjusted downward by the amount of the tax credit received, if applicable.

Integration into General Business Credit

The credit for the electric generators will be added to the general business credits that businesses can claim under the Internal Revenue Code. This means businesses will have the option to include this new credit alongside their existing credits, thereby encouraging them to invest in disaster preparedness.

Effective Date

The provisions stipulate that the tax credit and associated benefits will apply to expenses incurred after the bill is enacted. This allows businesses to begin planning and investing in necessary electric generators as soon as the bill becomes law.

Relevant Companies

• HSIC - Henry Schein, Inc.: A company that could potentially benefit due to its involvement in healthcare supply, especially in a disaster context.
• CAG - ConAgra Brands: This company, which produces food products, might be impacted as grocery stores could benefit from the legislation if they purchase generators.
• KMX - CarMax Inc.: While not directly a grocery store or hospital, CarMax may service areas affected by disasters and could be involved indirectly through its dealership network in high-risk areas.